The first month of 2010 has not been kind to crop prices. On most grains, oilseeds and specialty crops, values have been slipping.
On Jan. 12, the United States Department of Agriculture released a production report that surprised traders. The USDA significantly increased its 2009 production estimates, especially for American corn. Markets reacted immediately.
On Jan. 11, the March futures price for American corn was $4.20 a bushel. By the end of January, the price had dropped to around $3.60. Canadian feed barley sold into the domestic market has been slipping in price, reacting to the drop in American corn. Most Saskatchewan prices have now slipped to the $2.30-a-bushel range.
At the beginning of the year, the March futures price on canola was more than $410 a tonne. It rallied a bit on Feb. 2 to close at $380. The only good news is that the basis -- the difference between the futures price and the cash price -- has narrowed.
Still, producers selling their canola these days are lucky to realize much more than $8 a bushel. New crop prices for delivery in the fall are in a similar range. By comparison, new crop canola prices of around $10 a bushel could have been locked in earlier in the winter.
The price pressure is also evident in the Canadian Wheat Board's price estimates for the current crop year. The pool return outlooks (PRO) for wheat and durum were down in the estimate released Jan. 28.
The durum PRO dropped by as much as $15 a tonne, leaving the expected Saskatchewan farm gate price at around $4 a bushel for No. 1 durum with 12.5 per cent protein. Last crop year, durum was more than $8.50 a bushel and the year before that it was nearly $12.50.
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